For today's discussion, I offer Exhibit A:
This graph shows a line staying at a low level for most of American history and then suddenly shooting upward. Many people are worried about this line because it measures a quantity that is usually considered to be a Bad Thing: credit market debt as a percentage of GDP.
I offer two hypotheses to explain this graph. The first is a favorite of right-wing populists and libertarians, and was endorsed by Mencius Moldbug (the blog proprietor who was the immediate source of Exhibit A):
Hypothesis 1: Modern American wealth is illusory. It is built on a pyramid of debt and will eventually collapse. Our economic growth is driven by borrowing more and more money. This is not sustainable.
Those familiar with Ron Paul, Pat Buchanan, or other economic populists will immediately recognize hypothesis 1. It has a certain intuitive appeal and fits well within the narrative of modern social decay preferred by the paleocons.
The second hypothesis comes from a very different perspective. To me, merely stating the second hypothesis deflates the appeal of the first:
Hypothesis 2: The timing of the explosive growth of the credit market coincides with exponential growth in commercially available computing power. Technological change drastically reduced frictional transaction costs involved in complex capital transfers, creating a greater number of profitable credit transactions at the margin. The ventures funded by these marginal transactions have generated value over time and increased average human prosperity. A large credit market is a beneficial side-effect of a healthy modern economy.
You may want to call hypothesis 2 the "skeptical", "conservative", or "Panglossian" hypothesis, depending on your point of view.